Pathare Satish Gulabrao, Ahmednagar V. ITO, Ahmednagar

ITA 1462/PUN/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 0873 (ITAT-PUNE)
• Duration Of Justice: 4 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-05-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 14-12-2010
• Assessment Year: 2006-2007
• Appeal Filed On: 23-12-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMARINDER KUMAR
• Section: 40(a)(ia)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SINGLE MEMBER CASE : PUNE BENCH, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV (JM) ITA NO. 1462/PN/2009 (A.Y: 2006-07) PATHARE SATISH GULABRAO, A/P. VADULE, TAL. PARNER, DIST. AHMEDNAGAR PAN : AIOPP0358C .. APPELLANT V. INCOME-TAX OFFICER, WARD 4, AHMEDNAGAR . RESPONDENT APPELLANT BY : SHRI M.K. KULKARNI RESPONDENT BY : SHRI. AMARINDER KUMAR ORDER THIS APPEAL HAS BEEN FILED BY THE ASSESSEE CHALLE NGING THE ORDER OF THE CIT (A) - I, PUNE DATED 28.09.2009 FOR THE A .Y. 2006-07 ON TWO ISSUES. 2. THE FIRST ISSUE IS WITH REGARD TO DISALLOWANCE M ADE BY THE A.O INVOKING THE PROVISIONS OF SECTION 40(A)(IA) . THE A.O HAS DISALLOWED RS. 1,21,443/- BY INVOKING THE PROVISIONS OF SECTIO N 40(A)(IA) IN RESPECT OF INTEREST PAYMENT MADE TO ESCORT LTD., W HICH WAS CONFIRMED BY THE CIT(A). ITA NO.1462/PN/2009 PATHARE SATISH GULABRAO, A.Y. 2006-07 PAGE 2 OF 3 3. THE LEARNED A.R. POINTED OUT THAT THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF JAIPUR A BENC H OF THE TRIBUNAL IN THE CASE OF JAIPUR VIDYUT VITRAN NIGAM LTD. V/S. D CIT, WHEREIN IT HAS BEEN HELD THAT PROVISIONS OF SECTION 40(A)(IA) APP LY ONLY WHEN THE AMOUNT IS PAYABLE AND NOT WHERE THE EXPENDITURE IS PAID. THE WORD PAYABLE IS NOT DEFINED BUT THE WORD PAID IS DE FINED IN SEC. 43(2) TO MEAN ACTUALLY PAID OR INCURRED. HENCE, BY IMPLICAT ION THE WORD PAYABLE DOES NOT INCLUDE PAID. IN CASE, THE AS SESSEE HAD MADE ACTUAL PAYMENT, PROVISIONS OF SEC. 40(A)(IA) ARE NOT APPLI CABLE. IN THE CASE BEFORE US, THE UNDISPUTED STAND OF ASSESSEE IS THAT THE EXPENDITURE IN QUESTION HAS BEEN PAID DURING THE YEAR UNDER CONSID ERATION, SO FOLLOWING THE RATIO OF JAIPUR BENCH IN THE CASE OF JAIPUR VIDYUT VITRAN NIGAM LTD. (SUPRA), WE HOLD THAT THE WORD PAYABLE DOES NOT INCLUDE PAID AND ONCE ASSESSEE HAS ACTUALLY MADE THE PAYM ENT OF INTEREST IN QUESTION, THE PROVISIONS OF SEC. 40(A)(IA) IS NOT A PPLICABLE. ACCORDINGLY, THE DISALLOWANCE IN QUESTION IS QUASHED. 4. THE ISSUE NO. 2 IS WITH REGARDS TO DISALLOWANCE MADE BY THE A.O CLAIMED AS BAD DEBT OF RS.1,33,901/-. WE FIND THAT THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE ORDER OF HONBLE S UPREME COURT IN THE CASE OF T.R.F. LTD. V/S. CIT, REPORTED IN 35 DTR ( SC) 156, WHEREIN IT WAS HELD THAT AFTER 1 ST APRIL 1989, IT IS NOT NECESSARY FOR ASSESSEE TO ESTABLISH THAT THE DEBT, IN FACT, HAS BECOME IRRECO VERABLE. IT IS ENOUGH ITA NO.1462/PN/2009 PATHARE SATISH GULABRAO, A.Y. 2006-07 PAGE 3 OF 3 IF THE BAD DEBT IS WRITTEN OFF AS IRRECOVERABLE IN THE ACCOUNT OF ASSESSEE. IN THE INSTANT CASE, IT IS NOT IN DISPU TE THAT ASSESSEE HAS WRITTEN OFF BAD DEBT IN ITS ACCOUNTS, SO FOLLOWING THE RATIO OF TRF LTD. (SUPRA), THE ASSESSEE IS ENTITLED FOR CLAIM OF BAD DEBT IN QUESTION. THE A.O. IS DIRECTED ACCORDINGLY. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED ON 21ST DAY OF MAY, 2010. SD/- ( SHAILENDRA KUMAR YADAV ) JUDICIAL MEMBER PUNE DATED THE 21ST MAY, 2010 US COPY OF THE ORDER IS FORWARDED TO : 1. THE ASSESSEE 2. THE DEPARTMENT 3. THE CIT(A) I PUNE 4. THE CIT I, PUNE 5. THE D.R. SMC BENCH, PUNE 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL PUNE